One of the biggest challenges for anyone thinking of buying or selling real estate in any market across the country is determining the condition of the market in their particular area. Certainly the same holds true for the Lake Oroville real estate market.
But where in the world of realty can you get accurate market information? Zillow? Trulia? Maybe the nightly news.? Or better yet, how about Facebook? After all, if it is on Facebook, it must be true, right?
Your best resource for LOCAL market conditions is right here on this blog site. Over the past 5 years I have brought market updates, real estate advice, and sometimes some fairly provocative opinions. It is, and always will be, my opinion that there is a HUGE need for accurate local real estate market information in the Lake Oroville real estate market. I also believe that there is a drought of such information out there. This is why I make providing real estate market information the top priority of this blog site. I am always looking to bring information to you in a variety of ways and from different perspectives so that you know what is REALLY going on.
Which brings me to my latest graph. This graph illustrates the changes in the inventory of Lake Oroville homes for sale over the past 8 months at different pricing levels. What spurred me to research this is the fact that , although prices of homes that have sold has admittedly increased, the number of homes that are selling in the Oroville real estate market is on pace to be the first year since 2009 that the market will be selling fewer homes in the current year than the previous year. Yes, you read that right. Regardless of what the “salespeople” are telling you about how “busy” they are, the truth is the home sales in the Oroville market are significantly behind last years numbers.
Because the “numbers guy” in me is always looking to explain what would cause this to happen, I jumped into the database to see what I could glean. The graph below is the result of my research and is the basis for the following opinions:
1. Even though inventory of Lake Oroville area home listings have recently increase in the past 6 or 8 weeks, they are still too low to sustain any meaningful long term increase in unit sales. This is frustrating buyers and some have actually dropped out of the market until inventory conditions improve.
2. The run-up in prices over the past 12-18 months is now beginning to price some buyers out of the market and has caused some “irrational exuberance” among some sellers and their agents causing a lot home homes to be initially overpriced.
3. The graph tells us that in the past 8 months total inventory has increased about 22%. The graph also shows that the largest increases in inventories have occurred in the prices ranging from $200,000 to over $500,000 with inventories almost doubling in the $300,000 – $500,000 range. This is troubling for a market that has a number of economic challenges. But it is nothing compared my next observation.
4. The increase in the inventory of homes in the price ranges that some might call the “sweet spot” for most Lake Oroville real estate market home buyers, $100,000 – $200,000 is barely any increase at all, and at the $150,000 – $199,999 range it is actually negative growth. This is the reason I keep saying that now is the perfect time to sell if you have a home that will fit in this price range. You may even find yourself with multiple offers.
5. And what about the large growth in the range from $75,000 – $99,999? Some of this is due to rising prices that have shifted inventory from the lowest end of my price scale into the next tier. I think is also an effect of homes in this price range languishing on the market due to their “unloanability” and the fact that many “flippers” are not flippers anymore.
In my opinion, the Lake Oroville real estate market is still seeking that balance between the number of Oroville buyers looking to buy and the number of Oroville sellers willing to sell that My gut tells me, and I think that these number support this feeling, that until we see upwards of 275- 300 homes on the market, ( we currently have 196 on the market) with the vast majority of that growth taking place in the aforementioned “sweet spot” of the Oroville real estate market, that we will continue to face the same challenges that we are faced with today.
I am interested in what you think!